Muhumuza: Reforms, Not Just Spending, Key to Double-Digit Growth

Dr. Fred Muhumuza, a prominent economist, has emphasized that Uganda’s aspirations for double-digit economic growth hinge on implementing significant reforms, rather than solely focusing on budget allocations. Speaking at a post-budget dialogue, Muhumuza stressed that benefiting from the budget means either waiting for its “delivery” or actively participating in the “delivery process,” highlighting the need for systemic change.

The government’s ten-fold growth strategy, centered on Agro-industrialisation, Tourism Development, Mineral-Based Industrialisation, and Science, Technology, and Innovation (ATMS), is designed to expand the GDP significantly by 2040. However, Muhumuza believes the true signal from the latest budget lies in its stated intent for “reform” in areas like procurement, salaries, and the cancellation of public ceremonies. He points to the early 1990s, a period of structural reforms, as the last time Uganda achieved double-digit growth.

Muhumuza anticipates that proposed procurement reforms will face resistance from those benefiting from the current opaque system. Yet, he argues, these reforms are crucial for unlocking payments to businesses, clearing pension backlogs, and stabilizing civil servant incomes currently diluted by a complex web of allowances. The recent fuel levy increase, he contends, should be absorbed through internal reforms within Parliament, demonstrating consistency in the pursuit of efficiency.

He advocates for consolidating public transport, citing the inefficiency of officials using individual cars with drivers and fuel allowances. Muhumuza suggests that savings from such reforms should be channeled into improving civil servant salaries, arguing that a reliable salary allows for better household planning and boosts overall economic expenditure, which is vital for growth. He also expressed concern over environmental taxes disproportionately affecting the poor, suggesting a need for “climate-smart” alternatives rather than punitive measures.

Finally, Muhumuza underscores the importance of inclusive dialogue, recalling the Uganda Revenue Authority’s past slogan of “building Uganda together.” He views these discussions as critical opportunities to engage with government policy and offer constructive feedback, ensuring that economic planning considers the well-being of the common person.